How Facebook Could Take the Air Out of the NewFronts

By the end of this Wednesday, there will have been over 20 NewFront events held over 10-day period, as companies ranging from YouTube to PopSugar look to persuade advertisers to pump more ad revenue into Web video.

There’s one company that didn’t host a NewFront that could throw a wrench into everybody’s plans: Facebook.

Facebook isn’t in the business of producing or licensing content, like most of the companies presenting at the NewFronts. They have a different route into video advertising and one that Web video sales execs at other outlets privately admit has them worried.

Facebook lets marketers put video ads on the brands’ pages and soon it will go even further. Facebook is about to roll out auto-play video ads that can run across the site or targeted to specific demographics. Oh, and buy the way, we reach 1.2 billion people, so we can pretty much deliver any demographic you want.

After testing auto-play video ads last December for the movie “Divergent,” Facebook is about to start running auto-play video ads to its full user base (these are video ads that will play automatically when a Facebook user encounters them in their News Feeds). “We are actively talking to select partners,” said Fidji Simo, Facebook’s Product Manager, News Feed. “Now that we think we have a product that really really works there is some momentum behind this. We can go after much larger target audiences. We’ve very excited about capturing budgets.”

Ms. Simo was cautious about saying Facebook would directly take on the big online video outlets with the auto-play ads offering. At the moment, more brands are using Facebook’s preexisting News Feed ad units to drive users to videos on brands’ pages–a tactic Facebook calls “Video Page Post Ads.” But that doesn’t mean Facebook won’t point out some of the distinctive benefits of the new auto-play product.

The video outlets selling ad time in Web series are doing something different to Facebook, Ms. Simo said. “When you buy shows, they are a proxy for audiences. The advantage we have is that advertisers can select target audiences directly.”

Up first is Progressive Insurance, which has produced a unique video ad for Facebook that will debut on May 6. The brands ad is scheduled to reach every 18 to 34 year old user that logs onto Facebook on that day.

“This is essentially Facebook looking to create a big broad reach product,” said Jon Beamer, Progressive’s Marketing Innovation Business Leader, who said he believes auto-play ads will be weighed against ads attached to Web video series by marketers. “Yahoo’s shows for example, reach a different user profile than the site’s core audience. Facebook is saying, you can own a demo for a day.”

It’s that kind of pitch that will resonate with more conservative marketers that are comfortable with, and believers in, TV, argued Brandon Rhoten, Vice President of Digital Marketing for Wendy’s. “The typical wall that media folks run into in big companies is history, history that TV works. And we’re always trying to shift the conversations. And it’s very difficult to change the language. Facebook’s video ads are actually apples to apples.”

That’s because Facebook is selling these ads like TV ads–using TV ratings-like data. And on Monday, Facebook will introduce a set of new video measurement tools for advertisers that will provide data such as unique viewers and audience retention for each campaign.

Mr. Rhoten said Wendy’s is looking to test the auto-play Facebook ads soon. And like Progressive, the plan is to produce original video spots for Facebook. That’s a step that most Web video advertisers haven’t been willing to take; the majority run TV spots online. In Wendy’s case, the fast food company has already had great success running unique video creative on Facebook–such as a campaign where fan tweets about Wendy’s sandwiches are dubbed over clips of soap operas and other content.

That campaign, “Pretzel Love Songs” reached 85 million people on Facebook, Mr. Rhoten claims. More importantly, the effort sold burgers. “We saw one of our biggest quarters in history of company,” he said. “It really changed our year.”

It’s that kind of impact that will ultimately move dollars from TV to the Web, said Mr. Rhoten. “Shiny for shiny’s sake wont make it across the boardroom. It’s gotta sell product. That’s how you tap into TV budgets.”

Not every ad buyer agrees. Many contend that video ads running within video content reach a user in a much different mindset, and are much closer to the TV experience that many brands are used to, compared to Facebook’s auto-play video ads, which are untested and may irritate some users.

“I wouldn’t say its apples and oranges because it still comes down to an impression,” said Adam Kasper,Chief Media Officer, Havas Media, North America. “Though the value of the impression ties back to the power of the message, the environment, the content it is connected to, the targeting, the receptivity of the audience at that time, etc. I think it is a question of professionally curated content vs socially curated. What does a publisher think you want based on what it is promoting or what it knows about you versus what do people you know or follow publish?”

There are a lot of unknowns with Facebook’s video roll out. But most agree the company is sitting a potentially highly valuable asset, assuming Facebook executes right. “Its funny, in the last year, Facebook has moved from brands getting organic reach to getting likes. It’s an ad platform.”

That’s increasingly true. But Facebook still has to be cautious. “We want to walk our way into his market really slowly,’ said Ms. Simo.